Contingent Liabilities: Three Lines of Defense for Lenders

Oct 30, 2017 02:30pm -
Oct 30, 2017 04:30pm
(GMT-5)

Event Description

Determining and assessing a borrower's contingent liabilities is an important step in the lending process, and one that many bankers do not fully understand. This webinar reviews the various types of contingent liabilities and the three lines of defense.

A contingent liability is a potential liability...it depends on a future event occurring or not occurring. Bankers must fully vet the adverse consequences of contingent liabilities to the financial condition of a borrower/guarantor/owner because of the risks of a potential problem loan and/or diminished support for a borrowing business or real estate project/property.

This program starts with reviewing the various types of contingent liabilities and why they are important. We then look at three "lines of defense" for determining and assessing contingent liabilities.

Lines of Defense:

  1. Full disclosure - including simple things like personal financial statement formats and other financial documents that contain clues to other contingent liabilities. 
  2. Developing a secondary or realistic liability which can emerge in the short term - going beyond the face amount of the guarantee (or other item), including: 
  • Understanding the full guarantee structure (guarantee percentage vs. ownership percentage)
  • Underlying cash flow and debt service coverage (DSC) of company or project/property as indicator of potential payment default, then any related collateral and/or reserves.
  • This section provides an assessment example using real estate projects.

​3. Understanding all related parties and the business balance sheet items among the parties

  • Various current receivables
  • Long-term or due from owners and how they arise
  • Other amounts due to owners (liabilities) and various levels or types of subordinated debt or liabilities
  • This section includes examples from financial statements and tax returns, plus issues with corporate "off balance sheet" items such as standby letters of credit and corporate guarantees.

Who Should Attend?

Commercial and business lenders, community bank lenders, private bankers, credit analysts and portfolio managers, credit officers, loan review specialists and others involved in the consumer and commercial lending process.

REGISTRATION OPTIONS

If you are having issues with registering online, please contact CBAO's Education & Training Coordinator, Lianne Simeone, (614) 610-1877.


Event Type:Webinar &/or On-Demand Link/CD
Early registration ends on Sep 19, 2017.
Regular registration starts on Sep 20, 2017 and ends on Oct 30, 2017.
Late registration starts on Oct 31, 2017.
(GMT-05:00) Eastern Time (US & Canada)

 

Registration Fees
Fee TypeEarlyRegularLate
 Live Webinar
Member Fee: $265.00$265.00$290.00
Non-Member Fee: $400.00$400.00$425.00
 Additional Hookups
Member Fee: $175.00$175.00$175.00
Non-Member Fee: $260.00$260.00$260.00
 On Demand Link & "FREE" CD Rom
Member Fee: $345.00$345.00$345.00
Non-Member Fee: $490.00$490.00$490.00
 Both Live & On Demand Link (Includes CD Rom)
Member Fee: $395.00$395.00$420.00
Non-Member Fee: $600.00$600.00$625.00